Aristotle said: “philosophy begins in wonder."
It also ends in wonder. The ultimate way we relate to the world as something sacred is by renewing our sense of wonder.
-Sam Keen-

Friday, February 13, 2009

Cogitations on Government Bailouts

I do not pretend to understand the intricacies of economics, nor do I care to make the effort to learn. I do not understand all the factors that brought us to our present predicament, nor do I even pretend to have a clue about the best way to get us out of it. I have read a lot of articles lately arguing every facet of the issue. For the most part, they only make me more confused.

Generally, I can be very objective about things, but when I truly don't understand the facts, my emotions run rampant. I typically try not to be too dogmatic about things, but when my understanding fails and my emotions run amok, then my psyche falls back on ideology in a desperate attempt to cling to something.

In the case of our present crisis, that only creates more confusion for me because, while I'm a bleeding heart liberal who usually takes the side of the poor and the underdog, I also believe in free markets and personal responsibility. While I believe that whatever the government ultimately does about the crisis should include provisions for the sick, the aged, the young and the otherwise truly helpless, I don't like this whole bailout business on general principals.

The thread over at Pooch's Place about how people survived the Great Depression and a number of conversations we have had at work have caused me to think a lot about this whole bailout thing. It sort of flies in the face of my political ideals, but emotionally I'm opposed to the whole idea of government bailouts. The financial institutions got into trouble because they lent money for people to buy houses they couldn't afford. The bailout provides relief to the banks who made the bad loans and, potentially, to the borrowers. WTF? How is that fair? What about those of us who bought small houses we could afford and who never made a late payment? Why should we pay taxes to rescue banks who made stupid loans and forgive loans for people to live in big houses they couldn't afford in the first place.

I live in a two-bedroom concrete-block-and-stucco house that is considerably less than 2000 square feet. It belongs to us free and clear. We were never late with a payment and we paid off the entire loan years ahead of schedule. Call it sour grapes, but I'm not really thrilled about the prospect of my taxes going towards forgiveness of loans for people who are living in big houses they couldn't otherwise afford. I could use that money to make some upgrades to my house!

Why should the government bail out the auto industry? If General Motors made a car as good as a Honda Accord, people might buy it. My last car was a Saturn. I'd happily driven Jap Crap for decades, but let my DH talk me into the Saturn because it was cheap. Didja ever hear the one about "you get what you pay for"? The Saturn was cheap because it was crap. I am happily driving an Accord again. Why should we bail out the American car manufacturers because they mismanaged their companies and make shitty cars? What about the whole idea of free markets and capitalism? We don't bail out the mom and pop hardware store that got put out of business when WalMart came to town. Why should we bail out Ford because it can't compete with Toyota in the free market?

I think the market should be allowed to correct itself. If the government is going to bail anybody out, it should provide a lifeline to people who get caught up in the fallout. I'd rather see the government provide health insurance, education subsidies and child care subsidies to unemployed and underemployed people until they can get back on their feet when their employers implode. I admit that's a position that arises from my ideological belief in the free market and my emotional feeling that it's not fair for people like me to have to subsidize and bail out people who overreached their ability to pay, and ended up with nicer houses than I have!

This whole subject makes me feel that I am being small minded and petty, but I can't help but feel there is something fundamentally un-American with the whole idea of government bailouts for failed businesses.